Growing strong

By J.D. STETSON, News-Record Writer jstetson@gillettenewsrecord.net

Juan Peraltz is a family man, a small business owner and, starting this week, a risk-taker.

Peraltz opened Maria’s Mexican Restaurant in 2003 to help pay for his son’s college tuition, and every member of his family has worked there since.

The business has grown. It’s time to expand.

When the former Popeyes Chicken and Biscuits building came available after sitting vacant for more than a year, Peraltz jumped at the opportunity to open a second restaurant. He didn’t have the money to buy the building, but did have enough to lease it.

After much remodeling, his will be the first this week of several Gillette businesses that are completing some type of expansion plans.

Building and expanding

New small businesses created in the fires of the recession and the expansion of existing businesses amid a national credit crisis shows Gillette seems to be weathering the economic storm.

Commercial expansion is seeing growth rather than new development of commercial property, said Michael Surface, a senior planner with the City of Gillette.

New commercial construction has been down from previous quarters. Surface is now trying to determine how many businesses are expanding.

“If local business can expand, they’re actually adding more services to the community,” Surface said.

If existing businesses continue to grow and change during a credit crisis, Gillette is certainly in a better position than the rest of the country, said Katie Allen, community development director.

“It may not be the boom it was two years ago, but it’s still encouraging,” Allen said.

- Gillette had six new commercial permits issued in the first quarter of 2009, according to the city’s quarterly development summary.

- About 25 new projects were issued permits since the beginning of 2007.

Surface and Allen are optimistic that there will be a trend toward new commercial projects in the next year and that the existing trend for expansion likely will continue.

“Just in the last month, we had three different developers come to Gillette already just to feel out the economy. That’s very encouraging,” Allen said.

The city’s investment in infrastructure during the past few years, which includes the $16 million in state loans to begin the process to build a new 42-mile water pipeline, and the near completion of power plants near the city support the optimistic assertion that there will be more growth.

More infrastructure encourages businesses to continue to expand, Surface said.

House construction

While home building has slowed and some out-of-town contractors are pulling out, there still are many projects in the pipeline for completion.

- There were 148 housing permits issued in the first three months of 2009.

- The number is up from 98 permits during the first three months of 2008.

- There were 128 permits issued for the same period in 2007.

About 1,981 housing permits still are in the pipeline. Many are in the final plat stage. They are a result of the subdivision activity that took place at the end of 2005 through 2007, Surface said.

About 477 of the units are in the final plat review stage and include units for Iron Horse, Remington Estates, Bittercreek, Sawgrass and Legacy Ridge subdivisions.

The city still has a need for family housing based on the city’s very low vacancy rates for apartments and manufactured homes.

- The rate for apartments has gone up from .1 percent in the fourth quarter of 2008 to 1.4 percent at the end of March.

- Manufactured homes increased from 5.1 percent to 5.3 percent.

The city contends that a vacancy rate for apartments of 5 percent would create a good balance. When numbers are low, there’s a shortage.

It’s difficult to attract developers of multi-family dwellings to Gillette because of the high land cost. Developers also want to make sure the economy can sustain it.

The housing market is still going strong, said Jeff Riesland, Century 21 Real Estate Associates agent.

Many people who rented a home are now able to afford to buy a home after a price correction took place earlier in the year.

Loans still are being made for many of the buyers who qualify for rural development loans. They also are taking advantage of the low-interest rates.

The real estate forecast looks good going into the spring and the summer, Riesland said. He added that his office has had numerous calls on commercial property in the past few months.

Economic development

Bringing new business to Gillette is Campbell County Economic Development Corp.’s goal.

The agency conducted a retail market analysis in 2005 that identified the characteristics of the city that are meaningful to retail businesses.

Gillette has a lot of “bleed out” of people who spend money in other communities such as Rapid City, S.D., and Casper.

The study gave a snapshot of what the retail picture was like and also a few items that needed work. It didn’t give a long-term strategy.

The agency will now send representatives to meet with various commercial developers with the International Council of Shopping Centers to introduce them to Gillette.

“We’re meeting with them and letting them know that the whole country is not in a recession,” said Susan Jerke, interim executive director.

The agency also has applied for a United States Department of Agriculture grant to help them revamp the original study and produce marketing plans and contacts.

Most businesses are skeptical of Gillette because of its low population numbers and its mineral-based economy that doesn’t have a lot of diversity.

The draw to Gillette from surrounding communities in Crook and Johnson counties and the rest of Campbell County places the city on the threshold needed for most businesses to move in — roughly 50,000 people.

Work force also is an issue that is improving in the county. More people come to Gillette each day who are drawn to different fields of work or the latest education opportunities.

The agency also is working with the Campbell County Chamber of Commerce and the city to help retain and expand existing businesses.

While the agency works to build Gillette’s retail, there are others like the Prime Rib, Subway, Smith’s and Maria’s that continue to take risks and continue to expand.

“That’s just another example of businesses who are here committing their financial resources to expand, showing faith in the economic climate that is here in Campbell County,” Surface said.

Ready to open

As for Peraltz, he’s nervous and he’s cautious.

Seeing what happened to the former chicken business that once was housed in his new restaurant has taught him that even with a new building he must be prepared for what’s to come.

For the past several weeks, he’s been working to re-create the former fast-food place as a sit-down lunch and dinner restaurant. He’s remodeled the kitchen, installed a smoker to cook prime rib and rotisserie chicken and he’s applied for a liquor license.

At 10 a.m. Wednesday, the doors to Chicos Restaurant will open on Boxelder Road near Home Depot, and he’ll be put to the test.

“It’s ready or not, we must, we have to go,” Peraltz said.